To All Searchers: I’ve been having this conversation lately and I hate to be the bearer of bad news.

When you are doing your first SBA loan, the SBA lender is testing out the relationship. The SBA lender got comfortable with you as the operator and your business plan. They believe that you will execute on your business plan.

However, you have to give time in between your acquisitions to allow the lender to see how your first acquisition performs.

A roll-up strategy is a great strategy, and most banks can get behind the strategy if you have demonstrated that you have a stable business.

Most banks like to see at least one to two years of performance to judge whether the business is doing well.

If your plan is to acquire three to four companies within the same year of your first acquisition, I caution you on that. The bank will view that as very aggressive and will hurt your ability to borrow from the bank.

Banks like slow and steady.

Please consult with your SBA Banker when you are putting together your plan.

If you don’t have an SBA Banker, reach out to me for consult on your roll-up strategy, I’d be happy to share my wisdom on the best way to structure this.